Nucleus Research | Return On Investment (ROI) http://nucleusresearch.com We help our clients build the ROI business case for technology. Mon, 04 May 2015 18:49:49 +0000 en-US hourly 1 Business Analytics Are Going Vertical http://nucleusresearch.com/business-analytics-are-going-vertical/ http://nucleusresearch.com/business-analytics-are-going-vertical/#comments Mon, 04 May 2015 17:03:58 +0000 http://nucleusresearch.com/?p=7784 Vertical apps cut initial consulting costs by 65%, accelerate time to value by 57% As if the business analytics space...

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Vertical apps cut initial consulting costs by 65%, accelerate time to value by 57%

As if the business analytics space isn’t competitive enough for vendors, we are seeing a new battle line emerge – vertical offerings. Customers are demanding more off-the-shelf solutions, and smart vendors are responding with applications tailored to specific vertical markets. This is leading to results that are so compelling that we now believe ‘verticalization’ will emerge as a strategic differentiator and reshape the industry.

In fact, Nucleus Research found in a recent analysis that with vertical capabilities companies can reduce initial consulting costs by an average of 65 percent, while accelerating time to value by 57 percent.

We are not talking a slight edge here. Vendors have the ability to significantly reduce costs, streamline vertical solutions and take a significant lead over vendors offering stand-alone applications. All to the benefit of customers to shorten deployment time, reduce risk and maximize value.

The challenge for vendors will be to select the right vertical market to support and deliver the prebuilt industry templates and capabilities they require. Information Builders was one of the first vendors to embrace this trend, and have built a lead with solutions for a broad range of industries, including finance, government, healthcare, education, insurance, manufacturing, retail and energy. Infor is also delivering vertical capabilities for healthcare, hospitality and manufacturing and Birst has been adding vertical solutions too.

Large vendors such as IBM, SAP, Microsoft and Oracle all have a deep understanding of vertical markets and we expect to see more industry-specific solutions over the next 12 months. Stand-alone vendors risk becoming commoditized as companies opt for solutions that cut costs and deliver more value.

Of course the business analytics battle is fought on many fronts. In addition to vertical capabilities that deliver value, vendors must continue to offer innovative new features and make them as accessible as possible. (We recently noted that as analytics become more pervasive within companies, usability becomes a top priority. Strong functionality is squandered if those who need the insight cannot use the app. http://linkd.in/1DKuebN). Still, the vertical opportunity is both exciting and challenging for vendors. And will only benefit customers. Let the battle begin.

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An Unexpected Side Effect of ObamaCare http://nucleusresearch.com/an-unexpected-side-effect-of-obamacare/ http://nucleusresearch.com/an-unexpected-side-effect-of-obamacare/#comments Tue, 28 Apr 2015 20:17:56 +0000 http://nucleusresearch.com/?p=7776 How regulatory pressure is driving a renewed interest in Workforce Management Whether you support the Affordable Care Act (ACA and...

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How regulatory pressure is driving a renewed interest in Workforce Management

Whether you support the Affordable Care Act (ACA and often known as ‘ObamaCare’) or not, as the law it is forcing businesses to meet a complex new set of regulations. And while this adds new regulatory pressures to companies, a positive side effect is emerging. Just as Y2K caused companies to overhaul IT and Sarbanes Oxley pushed them to revamp financial processes, the ACA puts a new focus on HR practices.

As a result many companies are taking a closer look at their Workforce Management (WFM) technology, which may have been neglected, as a means to meet compliance with the ACA. Consequently many companies now have strong motivation to reassess and streamline their HR infrastructure to better serve their overall business needs, too. They should consider three major factors in their upgrade decision: cloud, speed and integration.

In fact, the ACA pressure comes as companies continue to migrate enterprise software to the cloud. This allows them to evaluate new options and move to a delivery model that is more flexible and will enable continual upgrades. On-premise solutions are probably a Band-Aid at best, at this point. Still, companies must carefully consider which cloud solution is best for their needs. They should beware of ‘pretend’ or private cloud solutions that do not deliver the full value of the Software-as-a-Service (SaaS) model. (See previous blog at http://nucleusresearch.com/beware-of-cloud-ish-solutions/)

Speed is another key consideration, as companies seek ways to improve efficiency and productivity. WFM has not been a priority at many companies for quite some time. With pressure from the ACA to upgrade anyway, companies should optimize their ROI and get a solution that is fast, flexible and meets their industry needs beyond compliance pressures.

Integration of disparate data sets is perhaps the biggest consideration in assessing WFM applications. The whole point of WFM is to reduce the complexity and enable the company to meet and prove compliance in a timely manner. The more data sets and the more disparate the data sources, the more challenging this becomes. This is perhaps where the WFM vendors most clearly differentiate their offerings. While many vendors have expressed plans to consolidate their data models soon, a few already provide solutions with a streamlined single data set. They lead the pack, as seen in the latest Value Matrix for WFM (H1 2015 – link to report) from Nucleus Research.

For better or for worse, the ACA is in effect and driving many businesses to innovate their solutions to meet compliance. Since many companies will be upgrading anyway, they should leverage their investment for benefits beyond ACA compliance. This will likely include a move to a cloud-based solution that is faster, more efficient and integrates multiple data sources into one. What an unexpectedly positive side effect.

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Why are so Many Companies Dissatisfied with their Supply Chain ROI? http://nucleusresearch.com/why-are-so-many-companies-dissatisfied-with-their-supply-chain-roi/ http://nucleusresearch.com/why-are-so-many-companies-dissatisfied-with-their-supply-chain-roi/#comments Mon, 27 Apr 2015 16:48:32 +0000 http://nucleusresearch.com/?p=7765 Supply chain blues in the age of the cloud Given the strategic importance of the supply chain to many businesses,...

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Supply chain blues in the age of the cloud

Given the strategic importance of the supply chain to many businesses, I was surprised to see how many organizations are unhappy with their return on investment (ROI). A recent Nucleus Research survey found 52 percent of deployments are not meeting ROI expectations with 34 percent of companies polled not even bothering to determine if they are getting a payback at all.

I’m not sure which finding is more shocking; the fact that so many customers are dissatisfied with their supply chain software, or that so many aren’t even measuring the value they’re getting. It’s like driving at night without your headlights on.

Just why are so many companies putting their supply chain on autopilot and accepting the status quo? There are highly differentiated solutions available, with the cloud generally delivering better ROI. Clearly the vendors are not successful in communicating this.

This provides a great opportunity for vendors to show value as the industry approaches the cloud inflection point, moving from on-premise. Beyond providing better cloud supply chain software, vendors will have to focus more on educating their customers on strategies to optimize value.

This is an industry where small margins can be vital to success. Cloud solutions not only provide a better overall ROI, but customers also can leverage the versatility of these types of deployments to maximize their investments. Ignore ROI at your own peril.

 

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The Mainstreaming of Analytics Puts A New Emphasis on Usability http://nucleusresearch.com/the-mainstreaming-of-analytics-puts-a-new-emphasis-on-usability/ http://nucleusresearch.com/the-mainstreaming-of-analytics-puts-a-new-emphasis-on-usability/#comments Wed, 22 Apr 2015 19:30:36 +0000 http://nucleusresearch.com/?p=7740 The mainstreaming of business analytics was inevitable. Once the realm of data scientists, analytics are increasingly being leveraged throughout the...

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The mainstreaming of business analytics was inevitable. Once the realm of data scientists, analytics are increasingly being leveraged throughout the enterprise to deliver valuable business insight. In fact, one of the biggest trends over the past few years has been integrating and even embedding analytics with other enterprise applications, such as CRM, ERP, back office applications and even the supply chain.

Analytics applications are delivering richer business insight across the enterprise, yet as they become more pervasive, they need to be highly accessible to a much broader set of business users. Well beyond the IT staff, today we see the customer service team, human resources and even marketing taking advantage of analytics to better understand their programs, make better decisions and justify budgets. This is putting a significant new emphasis on usability.

The latest Value Matrix for Business Analytics (H1 2015 – http://bit.ly/1DedurJ) from Nucleus Research shows the usability race clearly, as vendors add more intuitive user interfaces and make features easier to use. In fact, many are leveraging the cloud to provide solutions that are more complex under the hood, but easier to maneuver for the regular business user.

Birst, for example, prioritized usability and showed a significant jump in the Value Matrix. IBM also put strong emphasis on usability, further extending its lead. And GoodData, Information Builders and Yellowfin also improved their standings in the Value Matrix fueled by improvements in usability.

Of course usability is but one front in the highly competitive analytics space. Vendors also face difficult choices between developing operational analytics or focusing on predictive features that provide cognitive intelligence. Plus there is added pressure to verticalize solutions, as several vendors are experiencing great success with applications for specific markets, especially healthcare and pharmaceuticals. And yet, with all these choices, Nucleus predicts that usability will continue to be the driving trend that separates the wheat from the chaff.

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Beware of Cloud-ish Solutions http://nucleusresearch.com/beware-of-cloud-ish-solutions/ http://nucleusresearch.com/beware-of-cloud-ish-solutions/#comments Tue, 21 Apr 2015 17:00:42 +0000 http://nucleusresearch.com/?p=7729 Don’t be fooled by the ‘Pretend’ Cloud Marketing wizards have this uncanny way of branding their products with labels closely...

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Don’t be fooled by the ‘Pretend’ Cloud

Marketing wizards have this uncanny way of branding their products with labels closely aligned to customer demands. Some stretch the truth a bit and dilute the entire category. Take organic food, for example. Not all foods labeled as organic meet the same stringent requirements. In fact, recent reports suggest some items carrying the label are not organic at all.

That practice has spread to the tech industry and how companies are applying the cloud ‘label.’ And to keep it confusing, the industry throws around qualifying terms like ‘private’ cloud, ‘public’ cloud and even ‘hybrid’ cloud. Here’s a break down.

Real Cloud

If you are looking for the full set of benefits touted by cloud vendors, then you want a real cloud. Some call this the ‘public’ cloud or Software-as-a-Service (SaaS). In other words, this is the real deal. The real cloud not only cuts upfront capital expenditures, but also ensures an organization has the latest features and upgrades. All users are on a single instance of the application or suite, and it’s the latest, most up-to-date version. Updates are automatic and across the cloud. This enterprise-wide approach streamlines productivity and keeps everyone on the same page. The real cloud also offers attractive pay-per-use pricing.

Pretend Cloud

This is where marketing can get deceptive with applications that are cloud-like, but do not provide the full advantages of a real cloud solution. Honest vendors call this a ‘private’ cloud and an even better term would be hosted. But let’s not mince words – this is the pretend cloud. It is not SaaS and does not offer the attractive pay-per-use model that a real cloud can deliver. While this model does move an organization away from licensing software and managing it with on-premise resources, this is a mere dip of the toe into the cloud. This leverages the cloud for only the most basic advantage – software delivery. The pretend cloud struggles or is unable to offer the many other benefits of a real cloud.

Hybrid Cloud

If the pretend or ‘private’ cloud is a mere dip of the toe, then the hybrid cloud helps get the whole foot and, heck, even a leg up to the knee, into the water. That’s because a hybrid cloud includes a blend of elements from premises-based systems plus the ‘public’ cloud (and occasionally pulling in some ‘private’ cloud, too). You might also call this a mixed cloud. It still cannot deliver the full advantage of a real cloud solution, but gets an organization close and could be a bridge toward an eventual real cloud solution.

In fact, the hybrid cloud has been a reasonable solution for some organizations and industries that are concerned with a real or public cloud option. The financial services and healthcare industries have been especially reluctant to bring sensitive customer data into a public cloud solution, but still have the same external pressures to reduce costs, increase efficiencies and have a flexible solution.

As with any technology, the key is in assessing the benefits and evaluating which solution is best suited to your organization. Despite big claims, cloud applications are not one-size-fits-all, and they most certainly are not all created equally. Consider them closely along with the functionality and usability to get the most value from your software.

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Last Call: The HCM Flight to the Cloud is About to Take Off http://nucleusresearch.com/last-call-the-hcm-flight-to-the-cloud-is-about-to-take-off/ http://nucleusresearch.com/last-call-the-hcm-flight-to-the-cloud-is-about-to-take-off/#comments Wed, 15 Apr 2015 16:42:39 +0000 http://nucleusresearch.com/?p=7702 Board now or be left behind  As most of the of the enterprise has largely shifted to the cloud –...

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Board now or be left behind 

As most of the of the enterprise has largely shifted to the cloud – from the CRM and analytics trailblazers to industry laggards such as ERP – Human Resource Departments have blissfully maintained their bucolic, old world existence. Even with several cloud options, many HR organizations have ignored them, instead relying on their trusty on-premise applications for Human Capital Management (HCM). They are in for a rude awakening.

Unlike the early adopters of the cloud, driven by business managers making an end-run around IT to get better functionality, the IT department is leading the charge for cloud HCM. Tasked with reducing costs and boosting efficiency, IT is pushing HR into the cloud with a wave of new HCM applications. Nucleus Research predicts a rapid migration to cloud HCM ahead.

The question has shifted from ‘on-premise or cloud?’ to ‘which cloud solution?’ With native cloud HCM apps from vendors such as Ceridian, strong cloud versions of successful on-premise apps from the likes of Infor and emerging new apps from vendors that have largely resisted the cloud until recently, the options are broad and growing.

Beware of ‘pretend’ cloud solutions that offer the promises of HCM-as-a-Service but are essentially still on-premise applications disguised as a private cloud offering. (Stay tuned for our upcoming blog devoted to this topic)

In addition to selecting the right cloud, organizations still must focus on how to optimize value. Assessing usability and functionality can help pinpoint the best HCM for your organization.

To see the full report, go to http://nucleusresearch.com/research/single/technology-value-matrix-2015-hcm/

p62 - Technology Value Matrix 2015 - HCM

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Our 2015 Top Ten Predictions http://nucleusresearch.com/our-2015-top-ten-predictions/ http://nucleusresearch.com/our-2015-top-ten-predictions/#comments Thu, 22 Jan 2015 14:58:17 +0000 http://nucleusresearch.com/?p=7431 Our top 10 predictions went out last week. This year’s report was bit delayed from our normal November timeframe but...

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Our top 10 predictions went out last week. This year’s report was bit delayed from our normal November timeframe but the analyst team was under a bit of pressure this past Fall. We’ve had a great track record since the first top 10 was published in 2004 and now 11 years later I’m proud of the work and insight of Rebecca Wettemann and her team. Read them and judge for yourself.

We’ve predicted the end of the timeclock, the rise of 3D printing, the fall of Ballmer, and the restructuring of SAP. We pointed out the struggles of HP and the change in the nature of corporate IT. It’s no surprise we were early to embrace the cloud, given the obvious ROI from cloud-based solutions. We highlighted the rise of analytics, the weaknesses of “Big Data” (It’s only important to the extent you can boil it down to something useful), and saw the coming move to analytics within core application areas instead of standalone solutions. You probably know how we feel about Google glass.

Developing our top 10 starts by bringing the analyst team together and debating the future of technology. We’re looking at 2 to 3 years out, so no “flying car” predictions from us. With a wall filled with ideas we analyze each to assess the underlying value. Our view of the world is that technology that delivers value survives while technology that does not will wither (no, I still don’t get Apple). Interesting ideas such as 3D TVs and RFID without a clear value statement are more critically assessed. From there we cut the list to the 10 predictions we think are most interesting. It’s a great debate and interesting to watch the analyst team lobby for their favorites. Some years our top 10 actually had 11 predictions but for 2015, there was a clear consensus for 10.

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Google Glass http://nucleusresearch.com/google-glass/ http://nucleusresearch.com/google-glass/#comments Fri, 16 Jan 2015 19:20:34 +0000 http://nucleusresearch.com/?p=7454 Well that was a shocker. The children at Google couldn’t turn Google Glass into a real product. Not to worry,...

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Well that was a shocker. The children at Google couldn’t turn Google Glass into a real product. Not to worry, the company with the worst case of corporate ADD has already forgotten about it and is off chasing butterflies.

This isn’t a surprise and we saw it coming back in March. Google fell for what we in the analyst world call “shiny object syndrome.” Just because something seems like a cool idea doesn’t mean it is. The advantage of Google Glass wasn’t in displaying pages but in overlaying the virtual world onto the real world. Those applications didn’t appear. What we saw were static pages displayed for the wearer while everyone else in the room tried to guess what the wearer was paying attention too. To call it rude would be an understatement. Google Glass had potential, but it was so poorly executed it’s destined to be a Harvard Business School Case. Imagine a worker directing a tower crane and seeing the skeleton of the building as they move steel around. Imagine touring Boston with history overlaid on the real world and Yelp stars on restaurant doors keeping you from making a mistake and entering the Union Oyster House. I could go on. There are hundreds of great ideas that could have overcome the terrible geek factor and the entire Emily Post chapter on Google Glass etiquette that contains the single word “Never.” None of those ideas made it to market.

There’s still hope for Google Glass but it’s unlikely developers will invest without a market and buyers won’t buy without compelling applications. Without sales, will there be enough to justify a next generation of Glass? Doubtful.

I can’t wait for the Google self-driving car. This will be hysterical.

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Some quick cloud facts http://nucleusresearch.com/some-quick-cloud-facts/ http://nucleusresearch.com/some-quick-cloud-facts/#comments Mon, 12 Jan 2015 15:00:56 +0000 http://nucleusresearch.com/?p=7368 The cloud. Hard to call it a new topic, it’s not. What it is, to oversimplify, is just a delivery...

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The cloud. Hard to call it a new topic, it’s not. What it is, to oversimplify, is just a delivery mechanism. But it is, to say the least, a very valuable delivery mechanism. We’ve been looking into cloud solutions and the actual returns achieved by the hundreds of ROI case studies we’ve published. So let’s put some numbers behind the value of the cloud:
– Cloud delivers 1.7 times greater ROI than on premise
– Cloud applications require 80% less support from IT
– Cloud applications need 85% less up-front costs
– On-premise solutions are on average 1.8 versions behind while cloud solutions are current
– On-premise solutions have 20x more “stranded” or unneeded user licenses than cloud solutions
– The tax advantages of OPEX versus CAPEX can reduce project costs by up to 5%

It was hard to find any benefits from an on-premise (or hybrid managed service) solution. The most noted reasons for choosing on premise were security concerns or corporate temperament but, in most cases, even those reasons seemed half-hearted. From support, to deployment, to ease of use, to making the CFO smile, there’s no question cloud-based solutions deliver greater value.

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Is gamification a good idea? http://nucleusresearch.com/is-gamification-a-good-idea-2/ http://nucleusresearch.com/is-gamification-a-good-idea-2/#comments Mon, 05 Jan 2015 14:41:52 +0000 http://nucleusresearch.com/?p=7370 Gamification is a hot topic in the CRM space but I’m wondering if it’s really a good idea or a...

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Gamification is a hot topic in the CRM space but I’m wondering if it’s really a good idea or a waste of money. The underlying premise seems sound. Make the interaction with the technology fun and recognize employees (particularly sales employees) for efforts such as entering information into the CRM system. The assumption is that the more information that’s in the CRM system, the more valuable that CRM system is to the organization. I agree with that, and we’ve published plenty of ROI studies measuring the return when sales and marketing teams are robust users of a CRM solution, but I’m still not so sure about gamification.

One thing we did notice when assessing the productivity of sales reps is that 8% is the optimal amount of time a rep should spend entering data in the system. More than that, or less, and they are not maximizing their efficiency.

Giving sales reps a virtual gold star when they reach arbitrary levels rewards them for data entry and that’s fine if they were data entry employees, but they’re sales reps. Data entry is their supporting activity, but sales is their primary activity. Rewarding anything else can create unnecessary distractions and excuses. Gamification is still new and we’ll see changes, but before you jump on the gamification bandwagon, ask yourself, are you promoting the behavior you really want?

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